When I say that it is good for people who are looking for a practice that can be suited to anyone. The techniques of aikido are mostly about evading an attack, using a technique to break their balance, and then using their off balance to do something rude to them. When I say that aikido is not a fighting style, I am not saying that Aikido is not a valid martial art. What I mean is that Aikido people will not engage, attack or grab the other guy unless they have to. Image if two aikido guys squared off. Nobody would attack. Think about the UFC where one guy thought it was considered a win to make space and escape from the other guy. Shades of Ali vs Anoki.
It is a very fine distinction to make, but for most Aikido people I know there is a difference between defending yourself and doing something that will help you in a fight. Will aikido help you defend yourself? Yes. Will it help you against another trained fighter in a cage? Nope.
How much of Aikido works? Some. If I had to train a group of Aikido students to fight in a Judo tournament, but they would not be disqualified for any Aikido techniques that they practice, I would have a room full of guys throwing Waki Gatame to the ground. Very little of the standard Aikido techniques would work against a trained opponent. However, I have seen lots of guys use aikido horsing around and surprise guys.
Why the need for something as squirrelly as aikido? It requires nothing. No strength, no speed, no mental toughness, no real physical ability. Simply, it is the best choice for someone who has no other options. Long after you can no longer do judo with guys who are stronger than you, you can still rondori in aikido if everybody is just doing aikido. Watch the mifune clips. All of his uke are jumping for him and letting him do his thing. Does that mean he was a fake? No. Does it mean that to show what he knew, he needed people to cooperate? Yes. Aikido is like that.
When I said the hardest thing to defend was a grab, what I meant was a grab like you would grab in grip fighting. Not a balls out running tackle grab, but a calm and deliberate climbing grab that made the aikido student attack. Then aikido breaks down because it was never intended to be an attacking style.